Question

Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet for the North American market, requires a special plastic. During the quarter ending June 30, the company manufactured 3,000 helmets, using 1,680 kilograms of plastic. The plastic cost the company $12,768

According to the standard cost card, each helmet should require 0.50 kilograms of plastic, at a cost of $8.00 per kilogram.

Required:
1.	According to the standards, what cost for plastic should have been incurred to make 3,000 helmets? How much greater or less is this than the cost that was incurred? (Round Standard kilograms of plastic per helmet to 2 decimal places.)

Number of helmets
Standard kilograms of plastic per helmet
Total standard kilograms allowed
Standard cost per kilogram
Total standard cost
Actual cost incurred
Total standard cost
Total material variance—unfavorable

2.

Break down the difference computed in (1) above into a materials price variance and a materials quantity variance. (Round your actual materials price to two decimal places, and round your final answers to the nearest whole dollar. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)

Materials Price Variance
Materials Quantity Variance

Answer 1

Number of helmets				3000
Std kg of plastic per helmet				0.5
Total Std Kg allowed				1500
Std cost per kg				8
Total Std cost				12000
Actual cost incurred				12768
Total Std cost				12000
Total Material variance-Unfavorable				768 unfav
Material price variance = Actual Qty *Std cost per unt - Actual cost incurred
		1680*8 - 12768 =   672 Fav
Material Qty variance = Std price (Std qty-Actual Qty)
		8 (1500 -1680 ) = 1440 Unfav